What changed in this filing

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Item 1A. Risk Factors

2024-03-14 compared with 2023-03-16 · 182 added, 233 removed, 690 unchanged (38% of the section changed)

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Our recent growth rates may not be sustainable or indicative of future growth.

Since our founding, we have generated significant growth through acquisitions and by driving organic growth of our business.

Since our founding, we have generated significant revenue growth through acquisitions and by driving organic growth of our business.

Our revenue has grown at a CAGR of 26.0% from 2020 to 2023, and reached $675.4 million for the year ended December 31, 2023, up from $620.7 million for the year ended December 31, 2022, which represents revenue growth of 8.8% from 2022 to 2023.

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These efforts may prove to be more expensive than we currently anticipate, and we may not succeed in increasing our revenue sufficiently to offset these higher expenses.

If we are unable to effectively manage the risks and difficulties of investing to grow

our business, building relationships and developing new solutions as we encounter them, our business, financial condition and results of operations may suffer.

If we are unable to effectively manage the risks and difficulties of investing to grow our business, building relationships and developing new solutions as we encounter them, our business, financial condition and results of operations may suffer.

We may continue to experience significant quarterly and annual fluctuations in our operating results due to a number of factors, which makes our future operating results difficult to predict.

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• periodic fluctuations in demand for our software and services and volatility in the sales of our solutions and services;

• the success or failure of our acquisition strategy;

• the success or failure of our acquisition or divestiture strategy;

• our ability to timely develop and implement new solutions and services, as well as improve and enhance existing solutions and services, in a manner that meets customer requirements;

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• the timing of hiring personnel and of large expenses such as those for third-party professional services;

• technological developments, including new uses for generative AI;

• general economic conditions;

• our ability to appropriately resolve any disputes relating to our intellectual property;

• the impact of a recession, pandemic or any other adverse global economic conditions on our business, including the impact of the ongoing COVID-19 pandemic.

• the impact of a recession, pandemic or any other adverse global economic conditions on our business.

We have in the past experienced, and we may experience in the future, significant variations in our level of sales.

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Failure to achieve our quarterly goals will decrease our value and, accordingly, the value of our securities.

We may reduce our rate of acquisitions and may be unsuccessful in achieving continued growth through acquisitions.

Since April 2017, we have consummated 52 acquisitions and have generated significant growth through acquisitions.

Although we expect to continue to acquire companies and other assets in the future, such acquisitions pose a number of challenges and risks, including the following:

• the ability to identify suitable acquisition candidates or acquire additional assets at attractive valuations and on favorable terms;

• the availability of suitable acquisition candidates;

• the ability to compete successfully for identified acquisition candidates, complete acquisitions or accurately estimate the financial effect of acquisitions on our business;

• higher than expected or unanticipated acquisition costs;

• effective integration and management of acquired businesses in a manner that permits the combined company to achieve the full revenue and cost synergies and other benefits anticipated to result from the acquisition, due to difficulties such as incompatible accounting, information management or other control systems;

• retention of an acquired company’s key employees or customers;

• contingent or undisclosed liabilities, incompatibilities and/or other obstacles to successful integration not discovered during the pre-acquisition due diligence process;

• the availability of management resources to evaluate acquisition candidates and oversee the integration and operation of the acquired businesses;

• the ability to obtain the necessary debt or equity financing, on favorable terms or at all, to finance any of our potential acquisitions;

• increased interest expense, restructuring charges and amortization expenses related to intangible assets;

• significant dilution to our stockholders for acquisitions made utilizing our securities;

• the ability to generate cash necessary to execute our acquisition strategy and/or the reduction of cash that would otherwise be available to fund operations or for other purposes.

While our acquisition strategy leverages our experience and utilizes internal criteria for evaluating acquisition candidates and prospective businesses, there can be no guarantee that each business will have all of the positive attributes we seek.

If we complete an acquisition that does not meet some or all of our criteria, such acquisition may not be as successful as one involving a business that does meet most or all of our criteria.

There can be no assurance that our criteria are accurate or helpful indicators of success, and we may fail or opt not to acquire successful businesses that do not otherwise satisfy our internal requirements and preferences.

In addition, we may consider acquisitions outside of our existing vertical markets and in industries or services in which we have limited expertise or experience.

While we will endeavor to evaluate the risks inherent in any particular acquisition candidate, there can be no assurance that we will adequately ascertain or assess all of the significant risk factors to such new markets, industries or services.

Even if we are able to complete acquisitions and other investments, such activities may not ultimately strengthen our competitive position or achieve our strategic goals and could be viewed negatively by existing or prospective customers, investors or other stakeholders.

We may not realize the anticipated benefits of any or all of our acquisitions or other investments in the time frame expected or at all.

For example, the process of integrating operations could cause an interruption of, or loss of momentum in, the activities of one or more of our combined businesses and the possible loss of key personnel.

Further, acquisitions and consolidations may also disrupt our ongoing business, divert our resources and require significant management attention that would otherwise be available for ongoing development of our current business.

Acquisitions can also result in a complex corporate structure with different systems and procedures in place across various acquired entities, particularly during periods in which acquired entities are being integrated or transitioned to our preferred systems and procedures.

Initiatives to integrate these disparate systems and procedures can be challenging and costly, and the risk of failure high.

Moreover, there can be no assurance that we will be able to identify suitable acquisition targets in the future, or to complete such acquisitions on acceptable terms or at all.

If we are unable to identify acquisition targets that meet our investment criteria and close such transactions on acceptable terms, our potential for growth by way of acquisition may be restricted, which could have an adverse effect on achievement of our strategy and the resulting expected financial benefits.

The occurrence of any of these factors may result in a decrease in any or all acquisition activity and otherwise adversely impact our operations, which may lead to less growth and a deterioration of our financial and operational condition.

Revenues and profits generated through acquisitions may be less than anticipated, and we may fail to uncover all liabilities of acquisition targets through the due diligence process prior to an acquisition, resulting in unanticipated costs, losses or a decline in profits, as well as potential impairment charges.

Claims against us relating to any acquisition may necessitate our seeking claims against the seller for which the seller may not indemnify us or that may exceed the seller’s indemnification obligations.

In evaluating and determining the purchase price for a prospective acquisition, we estimate the future revenues and profits from that acquisition based largely on historical financial performance.

Following an acquisition, we may experience some attrition in the number of clients serviced by an acquired provider of billing and payment solutions and marketing and customer retention services.

Should the rate of post-acquisition client attrition exceed the rate we forecasted, the revenues and profits from the acquisition may be less than we estimated, which could result in losses

or a decline in profits, as well as potential impairment charges.

Moreover, the anticipated benefits of any acquisition, including our revenue or return on investment assumptions, may not be realized.

We perform a due diligence review of each of our acquisition targets.

This due diligence review, however, may not adequately uncover all of the contingent or undisclosed liabilities we may incur as a consequence of the proposed acquisition, exposing us to potentially significant, unanticipated costs, as well as potential impairment charges.

Although a seller generally may have indemnification obligations to us under an acquisition or merger agreement, these obligations usually will be subject to financial limitations, such as general deductibles and maximum recovery amounts, as well as time limitations.

Certain transactions are also subject to limitations of the scope of a Representation and Warranty Insurance policy.

We cannot assure you that our right to indemnification from any seller will be enforceable, collectible or sufficient in amount, scope or duration to fully offset the amount of any undiscovered or underestimated liabilities that we may incur.

Any such liabilities, individually or in the aggregate, could have a material adverse effect on our business, results of operations and financial condition.

In addition, our insurance does not cover all of our potential losses, and we are subject to various self-insured retentions and deductibles under our insurance.

Although we believe we have sufficient reserves for contingencies, a judgment may be rendered against us in cases in which we could be uninsured or which exceed the amounts that we currently have reserved or anticipate incurring for such matters.

In order to support the growth of our business and our acquisition strategy, we may need to incur additional indebtedness or seek capital through new equity or debt financings, which sources of additional capital may not be available to us on acceptable terms or at all and may result in substantial dilution to our stockholders.

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Additional financing may not be available on terms favorable to us, or at all.

If we raise additional funds through further issuances of equity or convertible debt securities, our existing stockholders could suffer significant dilution, and any new equity securities we issue could have rights, preferences and privileges superior to those of holders of our ordinary shares.

If we raise additional funds through further issuances of equity or convertible securities, our existing stockholders could suffer significant dilution, and any new equity securities we issue could have rights, preferences and privileges superior to those of holders of our ordinary shares.

Any debt financing secured by us in the future could involve additional restrictive covenants relating to our capital-raising activities and other financial and operational matters, which may make it more difficult for us to obtain additional capital and to pursue business opportunities, including potential acquisitions.

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We may also potentially face competition from our current partners.

Our partners, including our integration partners for our Electronic Health Record and Practice Management solutions within Health Services, our Business Management Software solutions within Home Services and our payment and customer relationship management solutions within Fitness & Wellness Services, as well as our third-party payment processing partners, could become our competitors by offering similar services.

Our partners, including our integration partners for our EHR and PM solutions within Health Services, our Business Management Software solutions within Home Services and our payment and CRM solutions within Fitness & Wellness Services, as well as our third-party payment processing partners, could become our competitors by offering similar services.

Some of our partners offer, or may begin to offer, services in the same or similar manner as we do.

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Any of these potential results of consolidation could have a material adverse effect on our business, financial condition and results of operations.

We are dependent on payment card networks, such as Visa and MasterCard, and payment processors, such as Worldpay and PayPal, and if we fail to comply with the applicable requirements of our payment network or payment processors, they can seek to fine us, suspend us or terminate our registrations through our bank sponsors.

We are dependent on payment card networks, such as Visa and MasterCard, and payment processors, such as Worldpay and PayPal, and if we fail to comply with the applicable requirements of the payment networks or our payment processors, they can seek to fine us, suspend us, terminate our agreements and/or terminate our registrations through our bank sponsors.

We have entered into agreements with certain payment processors, including Worldpay and PayPal, in order to enable our clients’ processing of credit, debit and prepaid card transactions through the card networks, such as Visa and MasterCard.

Pursuant to these agreements with payment processors, we are registered with the card networks as an independent sales organization (“ISO”) of our sponsor bank or as a payment facilitator, and are subject to the card network rules and certain other obligations.

The payment networks routinely update and modify requirements applicable to merchant acquirers, including rules regulating data integrity, third-party relationships (such as those

with respect to bank sponsors and ISOs), merchant chargeback standards and the Payment Card Industry Data Security Standards (“PCI DSS”).

The rules of the card networks are set by their boards, which may be influenced by card issuers, some of which offer competing transaction processing services.

If we fail to comply with the applicable rules and requirements of the payment card networks or payment processors, they could suspend or terminate our registration.

Further, our transaction processing capabilities, including with respect to settlement processes, could be delayed or otherwise disrupted, and recurring non-compliance could result in the payment networks or payment processors seeking to fine us, or suspend or terminate our registrations which allow us to process transactions on their networks, which would make it impossible for us to conduct our business on its current scale.

Under certain circumstances specified in the payment network rules, we may be required to submit to periodic audits, self-assessments or other assessments of our compliance with the PCI DSS.

Such activities may reveal that we have failed to comply with the PCI DSS.

Pursuant to these agreements with payment processors, we are registered with the card networks as an independent sales organization (“ISO”) of our

sponsor bank(s) or as a payment facilitator(s), and are subject to the requirements of our bank sponsors, payment processors, as well as the card network rules and certain other obligations.

The payment networks routinely update and modify requirements applicable to merchant acquirers (i.e., sponsor banks) which are passed through to third parties such as ISOs or payment facilitators like us, including rules regarding data integrity, third-party relationships (such as those with respect to bank sponsors and ISOs), merchant chargeback standards and the Payment Card Industry Data Security Standards (“PCI DSS”).

If we fail to comply with the applicable rules and requirements of the payment card networks, bank sponsors or payment processors, they could suspend or terminate our registration (with the payment networks) and/or terminate our ISO and/or payment facilitator agreements, which would make it impossible for us to conduct our business on its current scale.

Further, our transaction processing abilities, including with respect to settlement processes, could be delayed or otherwise disrupted.

As required by the PCI DSS (and the payment network rules), we may be required to submit to periodic third-party audits, self-assessments or other assurances of our compliance with the PCI DSS.

Such reviews and audits may reveal that we have failed to comply with the PCI DSS (which could subject us to fines and penalties by the payment card networks).

In addition, even if we comply with the PCI DSS, there is no assurance that we will be protected from a security breach.

In the regular course of business, we enter into standard form contracts with a number of payment processors for the provision of payment processing and related services.

Our contracts with payment processors, including Worldpay and PayPal, include standard confidentiality, indemnification and data protection obligations, among others.

Our contracts with Worldpay and PayPal provide for certain termination events, such as material breach, and are subject to automatic annual renewal unless terminated by either party upon prior notice or for cause.

The termination of our registration with the payment networks or our relationships with the payment processors, or any changes in payment network, payment processor or issuer rules that limit our ability to provide merchant acquiring services, could have an adverse effect on our payment processing volumes, revenues and operating costs.

If we are unable to comply with the requirements applicable to our settlement activities, the payment networks or payment processors may no longer allow us to provide these services, which would require us to spend additional resources to obtain settlement services from a third-party provider.

In addition, if we were precluded from processing Visa and MasterCard transactions, which we access through our payment processor arrangements, we would lose substantially all of our revenue.

The termination of our registration with the payment networks or our agreements with the payment processors, or any changes in payment network, payment processor or issuer rules that limit our ability to provide merchant services, could have an adverse effect on our payment processing volumes, revenues and operating costs.

If we are unable to comply with the requirements applicable to our obligations under the payment networks rules or payment processor agreements, the payment networks or payment processors may no longer allow us to provide these services, which would require us to spend additional resources to obtain settlement services from a third-party provider.

In addition, if we were precluded from allowing our clients to process Visa and MasterCard transactions, which we access through our payment processor arrangements, we would lose substantially all of our revenue.

We are also subject to the operating rules of the National Automated Clearing House Association (“NACHA”), a self-regulatory organization which administers and facilitates private-sector operating rules for ACH payments and defines the roles and responsibilities of financial institutions and other ACH network participants.

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These obligations include audit and oversight by the financial institutions and the imposition of mandatory corrective action, including termination, for serious violations.

If an audit or self-assessment under PCI DSS or NACHA identifies any deficiencies that we need to remediate, the remediation efforts may distract our management team and be expensive and time consuming.

If an audit or self-assessment under NACHA identifies any deficiencies that we need to remediate, the remediation efforts may distract our management team and be expensive and time consuming.

If we cannot keep pace with rapid developments and changes in the electronic payments market or are unable to introduce, develop and market new and enhanced versions of our software solutions, we may be put at a competitive disadvantage with respect to our services that incorporated payment technology.

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The continued growth and development of our payment processing activities will depend on our ability to anticipate and adapt to changes in consumer behavior.

For example, consumer behavior may change regarding the use of payment card transactions, including the relative increased use of crypto-currencies, other emerging or alternative

payment methods and payment card systems that we or our processing partners do not adequately support or that do not provide adequate commissions to parties like us.

For example, consumer behavior may change regarding the use of payment card transactions, including the relative increased use of crypto-currencies, other emerging or alternative payment methods and payment card systems that we or our processing partners do not adequately support or that do not provide adequate revenue to parties like us.

Any failure to timely integrate emerging payment methods into our software, to anticipate consumer behavior changes or to contract with processing partners that support such emerging payment technologies could cause us to lose traction among our customers or referral sources, resulting in a corresponding loss of revenue, if those methods become popular among end-users of their services.

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Although we maintain liability insurance coverage, there can be no assurance that such coverage will cover any claim, prove to be adequate or continue to remain available on acceptable terms, if at all.

clients’ customers or others, which could have a material adverse effect on our business, financial condition and results of operations.

The loss, destruction or unauthorized modification of client or cardholder data could result in significant fines, sanctions and proceedings or actions against us by the payment networks, payment processors, sponsor banks, governmental bodies, our customers, our clients’ customers or others, which could have a material adverse effect on our business, financial condition and results of operations.

Any such sanction, fine, proceeding or action could result in significant damage to our reputation or the reputation of our customers, negatively impact our ability to attract or retain customers, force us to incur significant expenses in defense of these proceedings, disrupt our operations, distract our management, increase our costs of doing business and may result in the imposition of monetary liability.

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Certain efforts may be supported by significant financial and technological resources, making them even more sophisticated and difficult to detect.

Numerous and evolving cybersecurity threats, including advanced and persisting cyber-attacks, cyber-extortion, ransomware attacks, spear phishing and social engineering schemes, the introduction of computer viruses or other malware and the physical destruction of all or portions of our information technology and infrastructure could compromise the confidentiality, availability and integrity of the data in our systems.

Numerous and evolving

cybersecurity threats, including advanced and persisting cyber-attacks, cyber-extortion, ransomware attacks, spear phishing and social engineering schemes, the introduction of computer viruses or other malware and the physical destruction of all or portions of our information technology and infrastructure could compromise the confidentiality, availability and integrity of the data in our systems.

Despite our efforts to create security barriers against such threats, it is virtually impossible for us to eliminate these risks entirely.

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The techniques used to obtain unauthorized, improper, or illegal access to systems and information (including customers’ personal data), disable or degrade service, or sabotage systems are constantly evolving and have become increasingly complex and sophisticated, may be difficult to detect quickly, and often are not recognized or detected until after they have been launched against a target.

Even if identified, we may be unable to adequately investigate or remediate incidents or breaches due to attackers increasingly using tools and techniques that are designed to circumvent controls, avoid detection, and remove or obfuscate forensic evidence.

We have been and could in the future be subject to breaches of security by hackers or other malicious actors.

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While we maintain insurance coverage that may, subject to policy terms and conditions, cover certain aspects of cyber risks, such insurance coverage may be insufficient to cover all losses.

Although we generally require that our agreements with our distribution partners and service providers who have access to client and customer data include confidentiality obligations that restrict these parties from using or disclosing any client or customer data except as necessary to perform their services under the applicable agreements, there can be no assurance that these contractual measures will prevent the unauthorized disclosure of business or client data, nor can we be sure that such third parties would be willing or able to satisfy liabilities arising from their

breach of these agreements.

Any failure by such third parties to adequately take these protective measures could result in protracted or costly litigation.

In addition, our agreements with our bank sponsors (as well as payment network requirements) require us to take certain protective measures to ensure the confidentiality of business and consumer data.

Any failure to adequately comply with these protective measures could result in fees, penalties, litigation or termination of our bank sponsor agreements.

Any failure to adequately comply with these protective measures could result in fees, penalties, litigation or termination of our bank sponsor agreements, and/or registration with the payment card networks.

Our existing general liability and cyber liability insurance policies may not cover, or may cover only a portion of, any potential claims related to security breaches to which we are exposed or may not be adequate to indemnify us for all or any portion of liabilities that may be imposed.

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Accordingly, if our cybersecurity measures and those of our service providers, fail to protect against unauthorized access, attacks (which may include sophisticated cyber-attacks) and the mishandling of data by our employees and contractors, then our reputation, business, results of operations and financial condition could be adversely affected.

In addition, there can be no assurance that our cybersecurity risk management program and processes, including our policies, controls or procedures, will be fully implemented, complied with or effective in protecting our systems and information.

Our estimated total addressable market is subject to inherent challenges and uncertainties.

If we have overestimated the size of our total addressable market or the various markets in which we operate, our future growth opportunities may be limited.

We estimate the TAM, defined above, for our current solutions for service SMBs was approximately $1.3 trillion globally in 2020, of which approximately $520 billion was in North America, which refers to the United States and Canada.

We estimate the T AM, defined above, for our current solutions for service SMBs was approximately $1.6 trillion globally in 2023, of which approximately $662 billion was in North America, which refers to the United States and Canada.

Of the $662 billion, we estimate a $69 billion opportunity in Home Services, a $115 billion opportunity in Health Services, a $26 billion opportunity in Fitness & Wellness Services and a $452 billion opportunity in other services categories.

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As a result, our estimates of the annual total addressable market for our current solutions and services may prove to be incorrect.

If third-party or internally generated data prove to be inaccurate or we make errors in our assumptions based on that data, our the annual total addressable market for our solutions and services may be smaller than we have estimated, our future growth opportunities and sales growth may be impaired, any of which could have a material adverse effect on our business, financial condition and results of operations.

If third-party or internally generated data prove to be inaccurate or we make errors in our assumptions based on that data, the annual total addressable market for our solutions and services may be smaller than we have estimated, our future growth opportunities and sales growth may be impaired, any of which could have a material adverse effect on our business, financial condition and results of operations.

We calculate certain operational metrics using internal systems and tools and do not independently verify such metrics.

Certain metrics are subject to inherent challenges in measurement, and real or perceived inaccuracies in such metrics may harm our reputation and negatively affect our business.

We refer to a number of operational metrics in our public disclosures, including Pro Forma Revenue Growth Rate, Adjusted Gross Profit, Adjusted EBITDA, monthly net pro forma revenue retention rate, lifetime value of a customer, customer acquisition costs and other metrics.

We refer to a number of operational metrics in our public disclosures, including Pro Forma Revenue Growth Rate, Adjusted Gross Profit, Adjusted earnings before interest, taxes, depreciation and amortization (“EBITDA”), monthly net pro forma revenue retention rate, lifetime value of a customer, customer acquisition costs and other metrics.

We calculate these metrics using internal systems and tools that are not independently verified by any third party.

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In addition, limitations or errors with respect to how we measure data or with respect to the data that we measure may affect our understanding of certain details of our business, which would affect our long-term strategies.

these figures, our reputation may be significantly harmed, and our operating and financial results could be adversely affected.

If our operating metrics or our estimates are not accurate representations of our business, or if investors do not perceive our operating metrics to be accurate, or if we discover material inaccuracies with respect to these figures, our reputation may be significantly harmed, and our operating and financial results could be adversely affected.

Failure to effectively develop and expand our sales and marketing capabilities could harm our ability to increase our customer base and achieve broader market acceptance and utilization of our solutions.

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Any loss, change or other adverse event related to our key customer relationships could have an adverse effect on our business, results of operations and financial condition.

Our systems and our third-party providers’ systems, including Worldpay, PayPal and other payment processing partners, may fail, or our third-party providers may discontinue providing their services or technology generally or to us specifically, which in either case could interrupt our business, cause us to lose business and increase our costs.

Our information technology systems and our third-party providers’ information technology systems, including Worldpay, PayPal and other payment processing partners, may fail, or our third-party providers may discontinue providing their services or technology generally or to us specifically, which in either case could interrupt our business, cause us to lose business and increase our costs.

We rely on our systems, technology and infrastructure to perform well on a consistent basis.

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Some of these organizations and service providers are our competitors or provide similar services and technology to our competitors, and we may not have long-term contracts with them.

If these contracts are canceled or we are unable to renew them on commercially reasonable terms, or at all, our business, financial condition and

results of operation could be adversely impacted.

The termination by our service or technology providers of their arrangements with us or their failure to perform their services efficiently and effectively may adversely affect our relationships with our clients and, if we cannot find alternate providers quickly, may cause those clients to terminate their processing agreements with us.

If these contracts are canceled or we are unable to renew them on commercially reasonable terms, or at all, our business, financial condition and results of operation could be adversely impacted.

The termination by our service or technology providers of their agreements with us or their failure to perform their services efficiently and effectively may adversely affect our relationships with our clients and, if we cannot find alternate providers quickly, may cause those clients to terminate their processing agreements with us.

We will continually work to expand and enhance the efficiency and scalability of our framework to improve the consumer and service professional experience, accommodate substantial increases in the number of visitors to our various platforms, ensure acceptable load times for our various solutions and services and keep up with changes in technology and user preferences.

If we do not do so in a timely and cost-effective manner, the user experience and demand across our brands and businesses could be adversely affected, which could adversely affect our business, financial condition and results of operations.

Our systems and operations or those of our third-party technology vendors could be exposed to damage or interruption from, among other things, fire, extreme weather events (including floods, storms, droughts and extreme temperatures) and other natural disasters, power loss, telecommunications failure, unauthorized entry, computer viruses, denial-of-service attacks, acts of terrorism, human error, vandalism or sabotage, financial insolvency and similar events.

Extreme weather events, as well as changes in ambient temperature and precipitation patterns, may become more frequent or severe as a result of climate change.

Our information technology systems and operations or those of our third-party technology vendors could be exposed to damage or interruption from, among other things, fire, extreme weather events (including floods, storms, droughts and extreme temperatures) and other natural disasters, power loss, telecommunications failure, unauthorized entry, computer viruses, denial-of-service attacks, acts of terrorism, human error, vandalism or sabotage, financial insolvency and similar events.

Extreme weather events, changing water levels, as well as changes in ambient temperature and precipitation patterns, may become more frequent or severe as a result of climate change.

Our property and business interruption insurance may not be adequate to compensate us for all losses or failures that may occur, and the cost and availability of such insurance may be adversely impacted to the extent events become more frequent or severe.

Defects in our systems or those of third parties, errors or delays in the processing of payment transactions, telecommunications failures or other difficulties could result in:

While we and the third parties upon whom we rely have certain backup systems in place for certain aspects of our respective frameworks, none of our frameworks are fully redundant and disaster recovery planning is not sufficient for all eventualities, particularly given some of the uncertainties associated with longer term projections, including those associated with climate change.

Defects in our information technology systems or those of third parties, errors or delays in the processing of payment transactions, telecommunications failures or other difficulties could result in:

• loss of revenues;

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• loss of client and cardholder data;

• fines imposed by payment networks;

• fines imposed by payment networks or bank sponsors;

• harm to our business or reputation resulting from negative publicity;

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To the extent that such disruptions result in delays or cancellations of customer orders, or adversely impact the deployment of our solutions, our business, operating results and financial condition would be adversely affected.

If lower margin solutions and services grow at a faster rate than our higher margin solutions and services, we may experience lower aggregate profitability and margins.

While we have experienced significant growth across our offering of solutions and services, certain solutions and services, such as our Marketing Technology Solutions, have lower margins as compared to our subscription and transaction fee services, such as our vertical Business Management Software and integrated payment solutions.

If we are unable to improve our margin, in particular within Marketing Technology Solutions, we may experience lower aggregate profitability and margins.

While we have experienced significant revenue growth across our offering of solutions and services, certain solutions and services, such as our Marketing Technology Solutions, have lower margins as compared to our subscription and transaction fee services, such

as our vertical Business Management Software and integrated payment solutions.

For the year ended December 31, 2023, subscription and transaction fees and Marketing Technology Solutions generated 77.0% and 19.7%, respectively, of our total revenues.

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In addition, we may be unable to achieve satisfactory prices for our offerings or maintain prices at competitive levels across our offering of solutions and services.

If we are unable to maintain our prices, or if our costs increase and we are unable to offset such increase with a commensurate increase in our prices, our margins could decline.

If we are unable to maintain our prices, or if our costs increase and we are unable to offset such an increase with a commensurate increase in our prices, our margins could decline.

We will continue to be subject to significant pricing pressure and expect that we will continue to experience growth across our offerings, including in respect of our lower margin solutions, such as our Marketing Technology Solutions, which will likely have a material adverse effect on our margins.

The COVID-19 pandemic has impacted, and a future pandemic, epidemic or outbreak of an infectious disease could impact, our business, financial condition and results of operations, as well as the business or operations of third parties with whom we conduct business.

The COVID-19 pandemic and related health concerns relating to the outbreak significantly increased economic uncertainty and has caused economies, businesses, markets and communities around the globe to be disrupted, and in many cases, shut-down.

The COVID-19 pandemic is evolving, and to date has led to the implementation of various responses, including government-imposed quarantines, travel restrictions and other public health safety measures, as well as the development and controlled distribution of vaccines.

A future pandemic, epidemic or outbreak of an infectious disease could impact, our business, financial condition and results of operations, as well as the business or operations of third parties with whom we conduct business.

COVID-19 and the related health concerns relating to the outbreak significantly increased economic uncertainty and has caused economies, businesses, markets and communities around the globe to be disrupted, and in many cases, shut-down.

Measures to control the spread of the disease also negatively impacted SMBs, including consumer spending and business spending habits, and adversely impacted our workforce and operations and the operations of our customers across industries and markets.

Although measures have eased in many regions, overall measures to contain COVID-19 outbreaks may be reinstated, causing similar adverse impacts.

Measures to contain COVID-19 outbreaks may be reinstated, causing similar adverse impacts.

Conversely, pandemics, epidemics and outbreaks may significantly and temporarily increase demand in certain industries and markets in which we operate.

For example, the COVID-19 pandemic generally increased demand for, and utilization of, telehealth services, and increased demand from customers shifting to technology-focused, digital-first business models.

For example, COVID-19 generally increased demand for, and utilization of, telehealth services, and increased demand from customers shifting to technology-focused, digital-first business models.

While such increases may help to offset the decline of business and demand in other industries, there can be no assurance that these levels of interest, demand and use will continue at current levels or will not decrease in the future.

Federal and state budget shortfalls, exacerbated by the COVID-19 pandemic, could lead to potential reductions in funding for Medicare and Medicaid.

Federal and state budget shortfalls could lead to potential reductions in funding for Medicare and Medicaid.

Further reductions in reimbursements from Medicare and Medicaid could lead to our Health Services customers postponing expenditures on information technology and related services.

It is possible that the increase in remote or hybrid work arrangements stemming from the COVID-19 pandemic may also result in consumer and patient privacy, IT security and fraud risks.

Further, the widespread COVID-19 pandemic resulted in, and may in the future result in, significant disruption of global financial markets, which could result in a reduction in our ability to access capital that could adversely affect our liquidity.

The full extent to which the outbreak of COVID-19 will impact our business, results of operations and financial condition is still unknown and will depend on future developments, which are highly uncertain and cannot be predicted.

To the extent the COVID-19 pandemic or another pandemic, epidemic or outbreak of an infectious disease adversely affects our business, financial condition and results of operations, it may also have the effect of heightening many of the other risks described in this “ Risk Factors ” section.

It is possible that the increase in remote or hybrid work arrangements stemming from COVID-19 may also result in consumer and patient privacy, IT security and fraud risks.

Further, a pandemic, epidemic or outbreak of an infectious disease may in the future result in, significant disruption of global financial markets, which could result in a reduction in our ability to access capital that could adversely affect our liquidity.

The full extent to which a pandemic, epidemic or outbreak of an infectious disease will impact our business, results of operations and financial condition is still unknown and will depend on future developments, which are highly uncertain and cannot be predicted.

To the extent a pandemic, epidemic or outbreak of an infectious disease adversely affects our business, financial condition and results of operations, it may also have the effect of heightening many of the other risks described in this “ Risk Factors ” section.

We are subject to economic and political risk, the business cycles of our clients and changes in the overall level of consumer and commercial spending, which could negatively impact our business, financial condition and results of operations.

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These factors may also cause our customers to reduce their capital expenditures, alter the mix of services purchased and otherwise slow their spending on our services.

In addition, due to these conditions, many of our competitors may be more inclined

to take greater or unusual risks or accept terms and conditions in contracts that we might not deem acceptable.

These conditions and factors may reduce the demand for our services and solutions, and more generally may adversely affect our business, results of operations and financial condition.

In addition, due to these conditions, many of our competitors may be more inclined to take greater or unusual risks or accept terms and conditions in contracts that we might not deem acceptable.

These conditions and factors may reduce

the demand for our services and solutions, and more generally may adversely affect our business, results of operations and financial condition.

A weakening in the economy could have a negative impact on our customers, as well as the customers they serve who purchase solutions and services using the payment processing systems to which we provide access, which could, in turn, negatively affect our business, financial condition and results of operations.

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We also have a certain amount of fixed and semi-fixed costs, including rent, debt service and salaries, which could limit our ability to quickly adjust costs and respond to changes in our business and the economy.

General inflation, including wage inflation, increases in interest rates, currency volatility as well as monetary, fiscal and policy interventions by national or regional governments in anticipation of or reaction to such events could have negative impacts on our business by increasing our operating costs and our borrowing costs as well as decreasing the capital available for our customers to purchase our solutions and services.

We currently manage our exchange rate and interest rate risk using hedging instruments.

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We may be unable to attract and retain suitably qualified individuals who are capable of meeting our growing technical, operational and managerial requirements, on a timely basis or at all, and we have paid and may in the future be required to pay increased compensation in order to do so, including as a result of wage inflation.

Because of the technical nature of our solutions and services and the dynamic market in which we compete, any failure to

attract and retain qualified personnel, as well as our contract workers, could have a material adverse effect on our ability to generate sales or successfully develop new solutions, client and consulting services and enhancements of existing solutions and services.

Because of the technical nature of our solutions and services and the dynamic market in which we compete, any failure to attract and retain qualified personnel, as well as our contract workers, could have a material adverse effect on our ability to generate sales or successfully develop new solutions, client and consulting services and enhancements of existing solutions and services.

Also, to the extent we hire personnel from competitors, we may be subject to allegations that they have been improperly solicited or divulged proprietary or other confidential information.

We may be unsuccessful in achieving our objectives through acquisitions, dispositions or other strategic transactions.

Since April 2017, we have consummated 53 acquisitions and have generated significant growth through acquisitions.